Very pleased to invite Alex Dorsch, Managing Director and CEO of Chalice Mining , to the stage. By way of background, Alex joined Chalice in 2017 and was appointed Managing Director in late 2018. Since then, Alex has led the company from discovery through to project development at his flagship W. A.-based palladium nickel-copper project. Alex has diverse experience across the resources sector as a management consultant, engineer, project manager, and corporate advisor. Prior to joining Chalice , Alex was working with the global management consultancy McKinsey and commenced his career in engineering with BHP. Alex holds a Bachelor of Mechanical Engineering with first-class honors and a Bachelor of Finance from the University of Adelaide. Thanks very much, Alex.
Thanks, Christian, and good afternoon, everyone. Today, giving you an update on Chalice and who are developing, as it says there, the leading palladium nickel-copper project in the Western world, right here in good old W.A. We have, I guess, one of the higher-profile critical minerals projects in W.A., certainly one of the largest resource or undeveloped resources in all of W.A. It's a world-class deposit, 17 million ounces of PGEs, 960,000 tons of nickel, and 540,000 tons of copper in resource, and it's in a single open pit. It's a pretty spectacular discovery back in 2020. We've spent about AUD 225 million since then, sort of understanding it, defining it, and we think now we've got a pretty straightforward development pathway.
We've spent the last two years in a pretty tough market condition, redesigning the flow sheet and solving a lot of our metallurgical problems, and we've adapted the project just by scaling it down slightly to adapt to lower commodity prices. We've got all our approvals well and truly underway, and we've got sort of the real estate as well on top of the deposit as well as in all directions. We've got a huge exploration package as well, 7,000 sq km in the West Yilgarn; we started with about a staking exercise of about 11,000 sq km . We've screened about 4,000 sq km, so 7,000 sq km left. There's about 50 targets to drill over that package, which I'll talk to a bit later. Financially strong company, obviously you can't do development, you can't do exploration without having a balance sheet, so AUD 78 million cash and listed investments, fantastic strong position to be.
We are very fortunate we've held about 15 of our top 20 institutional holders, you know, through what was a pretty tough low in the commodity cycle. We've got a team obviously led by myself, but a group of people absolutely passionate about making another discovery and also developing Gonneville into a world-class producing asset, and it's a bargain at the moment. The investment opportunity, which I've talked to, is that you're basically paying AUD 21 per ounce of metal in the ground, excluding any value from nickel, copper, and cobalt, and prices of PGMs are on the rise. Palladium's back at about $1,200 an ounce, and platinum has hit a 10-year high of about $1,500 an ounce. I won't talk to this, but market cap today around about $650, so yeah, you're paying effectively the enterprise value, about double what we've spent on the project.
You get a pretty cheap discovery at the moment in the market. Probably the newest and more prominent shareholder on our register is Paradice, Adam Harvey, in the small-cap fund, which is fantastic, and it's a well-researched and highly liquid stock. Last couple of months or last three months have been fantastic where the stock's up about 2x in that space. What's triggered that really is as simple as the palladium price. Palladium is this very obscure small metal, about 9 million ounces a year, and it's one of these metals that goes into absolute rapid sort of price rise and price hike, price drop, very, very hypercyclical metal. What we're seeing at the moment, which makes this such a compelling sort of leveraged opportunity, is that palladium's on the way up, but we're still not at the marginal cost of supply just yet.
We need about AUD 1,450 to keep the Stillwater asset of Sibanye-Stillwater in operation. The price today at AUD 1,200 is still deep in the cost curve. We've seen two mines curtail, we've seen Stillwater cut their production by about 50%. We've also seen Lac des Iles in North America, basically the only sort of non-Russian, non-South African supply, has basically been curtailed. We've got a situation where sort of every automobile or 85% of the world's automobiles that are sold contain palladium, and sort of 85% of that palladium comes out of Russia and South Africa, and that's going up every day. The South Africans in particular have made almost zero effort in actually reinvesting into these very, very deep mines of the Bushveld Complex. Expect to see continued shrinkage of their output. Just recently, Valterra missed their half-year production guidance by 22%.
This is an incredibly tight and rapidly getting tighter market, and basically the demand profile is massively underestimated. Basically, consumers are saying very clearly we still want an engine in our electric vehicle. You're seeing a hybrid, either a series hybrid or a parallel hybrid, and that's going to basically underpin effectively a robust sort of demand profile for palladium for a very long time. We've seen speculators close their short positions; they had about a million ounces short in a 9 million ounce a year market. They've effectively closed those and sort of looking like they're going long on the metal, which is obviously a fantastic indication. I mentioned hybrids; I guess, you know, palladium is very, very simple. If you believe hybrids are the sort of the medium or longer-term solution to electrification, then palladium's in a fantastic position as an investment.
Internal combustion not only requiring stricter emissions standards over time, which just means that the catalyst and the amount of palladium you need in every vehicle just goes up and up over time, is offsetting any demand destruction that we're seeing through pure battery electric vehicles. I think it really does mean for the next 10 - 20 years we've got a very, very solid demand profile for this critical mineral. If demand's quite simple, supply is almost a story of sort of a sad industry that's just been depleted of capital. Yet, on the left-hand side, you can see primary supply. Every year, analysts in the dotted lines assume that the supply grows, and basically every year supply actually declines. We've seen about a 15% drop in overall PGE output from mines in the last three years, and recycling is the same story.
Every year, the analysts think that recycling's going to magically grow at sort of 10%- 20% CAGR, and basically every year recycling goes down or remains flat. This is, like I said, a rapidly tightening market and a very, very poorly understood market. It sort of provides opportunity. If you look at the price chart for palladium over the last seven years, this is where you get very excited as a commodities speculator because you can see almost a repeat happening of 2018, 2019, and maybe just the early indications of the price lifting off a low of about $1,000 an ounce, where it's been for the last two years. You see last cycle it went over $3,400 an ounce, and our share price peaked at over AUD 10 a share on the back of that.
Russia then started dumping into the market, started selling all the palladium through China. That basically depleted all the liquidity on Western markets, and we saw prices come back all the way down to AUD 900 or AUD 1,000. The really important part here is if you like commodity investing, it's important to have a commodity where if you go into incentive pricing, there's no actual elasticity of supply. There's no actually new assets or new producing assets that come online to meet the demand. You see this price action stay in incentive pricing for many, many years, and we can see exactly the same conditions sort of coming again in the windshield. That's meant just in the last few months our stock, like I said, about 100% up whilst the underlying spot price of palladium up about 40%. There's really just no other asset that's worth owning in palladium.
Obviously, 50% of the value of our resource is palladium. We're not only exposed to palladium, but there's just no other option in terms of investment grade or institutional grade. That, I guess, is the market, and that makes us all very, very excited to hopefully see palladium sort of north of $3,000 again. I think there is absolutely a realistic chance that it does, just given a look at the fundamentals and just how rapidly declining the supply side is whilst, as I said, everyone continues to buy hybrid vehicles. Our asset just outside of Perth, we're going to be a long-life, very, very low-cost asset. The reason we're going to be a low-cost sort of second quartile asset is because we've got a very, very simple flow sheet, and we basically start digging mineralization and high-grade from surface. We've got a singular open pit.
We don't have any pre-strip. We don't have any massive infrastructure capital. We just basically get into the highest grade of the resource from the get-go. We expect our costs to be very, very minimal or almost negated by byproduct credits in the early years. As we get into sort of year 10, 20, we expect to sort of sit, like I said, safely in the second quartile between Russia and South Africa. We've done a lot, as I said, in the last two years to really sort of recut the project and stage the capital out so we don't have a, you know, + AUD 1.5 billion capital hurdle anymore. We've got a sub-AUD 1 billion hurdle. That recut means we are now incentivized at much, much lower prices, and we can get into the industry at lower prices.
We think at the bottom of the cycle, sort of effectively where we are. We've made an investment in this project, AUD 225 million, as I said, since the discovery. We drilled about 300,000 m of drilling. We bought the farmland for about AUD 50 million. We've got the team in place now. We've got a COO, Dan Brearley , who's come to us from Evolution. We've got the key sort of development people involved. Obviously, this is a big bulk open pit project with now a very, very simple flow sheet. We've made, I guess, probably the most game-changing aspect of the last two years for the company was basically removing the need for a hydrometallurgical circuit. We only needed that hydrometallurgical circuit because we couldn't upgrade nickel to be a saleable product.
About six months ago, we cracked that one, and we finally got flotation alone to get us to a saleable nickel concentrate. That takes out a lot of cost, a lot of complexity. We're going to finalize our numbers in the fourth quarter of this year with the PFS. I think that's going to be a pretty foundational, big milestone for the company in terms of resetting people's understanding of the asset. Next year, we're going to move into off-take and obviously our full-form approvals submissions ahead of a targeted FID in 2027. I probably don't need to speak to this too much, but this is an absolute beast of a resource, 660 million tons, largely open pittable. We will probably get to a depth of around 400 m after 20 years of mining here, and there will still be probably 2/3 of the resource sitting underneath us.
It's a very, very well-understood resource, huge scale, very, very unique in terms of leverage to movements in the commodity prices. That metallurgical breakthrough, really what made it so compelling, and I guess the market was up about, the share price was up about 30% on that day, is that basically all the challenges that we were getting hit by over the 2023-2024 period revolved around not being able to sort of get to a saleable nickel concentrate with flotation. Earlier this year, like I said, suddenly we got the float to generate us a plus 8% nickel concentrate, which is saleable to a nickel smelter. We've got a fantastic rich copper concentrate, about 20% copper, 45 g- 60 g of PGEs in it. We've got another byproduct we've added as well just in the last few months.
We're going to make some very small volumes but high-grade magnetite iron ore as well in a similar manner to the way the Bushveld produces chromite as a byproduct. Once you're through the flotation and the mag separation, you basically blend the oxide together with the float tails, and you go through a CIL plant. It is effectively a gold plant bolted onto a standard concentrator with a sequential flotation configuration. We're getting great recoveries, and it's across the full grade spectrum. We know now about AUD 15 million of investment has gone into this. We've proven across the grade range that this is going to work, and we're going to get saleable concentrates and achieve those recoveries there. We're in a great position. Obviously, we need to sort of land that study in the market in November. Hopefully, palladium keeps trending the right way for us.
We're moving into off-take financing discussions next year, and we'll make our environmental submissions state and federal in the middle of 2026. We've done a lot of de-risking there, obviously, by acquiring the farmland. We own a lot of real estate in that part of the world and targeting an FID, as it says there, late 2027. We've also got major and strategic project status from the state and federal government. We've got every bit of government support here to bring Australia into the market as a PGE-producing country. The exploration side of our business, obviously, you know, 2/3 of our effort sort of goes into the development of Gonneville, the studies, the metallurgy, but we still have the same core team of geologists focused on the western side of the Yilgarn. Finding Gonneville right on the western edge of the Yilgarn was a bit of a game changer.
We see now basically a lot of new discoveries, particularly in orogenic gold, sort of happening in these higher metamorphic grade terrains. We're seeing sort of areas, huge areas of undrilled sort of new greenstone belts in the western side of W. A. We're very excited about the potential for gold. We have tested a number of targets looking for sort of Gonneville-like magmatic nickel-copper PGE targets. We haven't found too much just yet, but the focus is on absolutely trying to find a prize like a Boddington, like a hydrothermal gold-copper system with porphyry characteristics. Really, the world is our oyster here on the western side of W. A. because effectively no one has done really any material work in that part of W. A. at all. We're going to be air-core drilling again in about a month's time on some very exciting targets.
This one's just about 40 km northeast of Gonneville. This is a 7 km long gold-in-soil anomaly right on the terrain boundary between the Southwest and the Youanmi Terrane . Big sort of crustal scale feature, some very interesting high-grade, you know, historic workings just to the north there, about 3 km away. We drilled actually some plates here a little while ago, and we actually hit some gold when we were sort of aiming for nickel. One of those serendipitous sort of opportunities here, hopefully, to show that this is a fertile structure for a significant scale gold system. That anomaly, that soil anomaly, is still open as well. We've got more work to do to really get in there and drill lots and lots of air core into it. The Barrabarra project, this is north of Gonneville. This is sort of west of the Deflector operation, the Gullewa greenstone belt.
All that green area there was incorrectly mapped as granite-gneissic terrain by the geological survey, and that's just because they didn't see any outcrop, and they didn't see anything on the geophysics, which gave an indication of these mafic greenstone packages. Very, very limited drilling ever over a 3,500 sq km area, less than 500 drill holes, and something like 400 and something of those have been us. We've tested a number of things. We've got a lot of drilling to do here. We've already got what looks like the beginnings of a discovery, we hope, at Warspite, and we've got 8 m at 1.2 g gold to end of hole. There are about three or four targets there that we think can deliver a sizable new gold deposit in these higher metamorphic terrains. The reason to own Chalice is pretty simple.
If you think palladium as this sort of overly bearish thematic around the metal, and you think hybrids are going to stay around for longer, you think internal combustion is going to stay around for longer. In the absence of a very steep drop in electricity prices, we certainly think oil and internal combustion is going to be here for a very, very long time, and that's going to mean palladium is going to stay in this very, very tight market deficit type condition. We are positioned with basically the only credible development project in palladium worldwide outside of Russia and South Africa. We've got our approvals on the way, the PFS, like I said, in November, and the exploration drilling gives you a bit of upside that's not really priced into the stock.
Gonneville is obviously priced in, the expected future cash flows of Gonneville are sort of what the market uses to price Chalice , but you could argue that basically there's nil value being ascribed to one of the largest and more active exploration packages for gold in W. A. at the moment. You're getting a nice sort of cheap entry point at this part of the cycle, and certainly looking forward to seeing the rest of the year in terms of getting the pre-feasibility out in a rising price environment. Thank you.
Thanks very much for that, Alex. We've probably got time for one question from the audience if anyone would like to raise their hand. If not, we'll leave it there. Thanks again, Alex.